Master Builders Australia - Mixed Signals From Housing Finance Figures 1

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11th October 2010, 04:07pm - Views: 488





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Media Release



11 October 2010

MIXED SIGNALS FROM

HOUSING FINANCE FIGURES

Statement by Peter Jones, Chief Economist

A second consecutive increase in housing finance commitments in August masks a divergence –

loans for established dwellings show signs of recovery but loans for new building have yet to pick

up, according to peak building and construction organisation Master Builders Australia.

Mr Peter Jones, Master Builders’ Chief Economist, said

“A

second leg to

the residential building

recovery is by no means guaranteed as finance for the construction of,

and purchase

of,

new

dwellings struggles to overcome the hangover from the end of Government stimulus programs, the

lingering effects of the credit squeeze and tighter monetary policy.” 

He said, “Critical for the housing market will be a further period of interest rate stability to engender

confidence and encourage upgraders, investors and first home buyers alike.”  

“A solid pipeline of new building work lies ahead, but Australia requires a major phase of residential

building to make up for previous weak activity and

to cater for the

housing needs of the

population.” 

“Although finance commitments for the building or purchase of new dwellings remain up on the low

point in late 2008, loans now need to kick up again following 10 months of correction.”

“Despite some improvement in recent times, the investment-driven side of the new housing market

is still struggling to overcome the credit crunch and is constraining the upswing.”

“Master Builders urges the Reserve Bank to keep interest rates on hold for an extended period to

ensure that recovery in the interest

rate-sensitive residential building sector can regain

momentum.” 

Master Builders believes

that housing supply side issues and

affordability need to be

seriously

addressed in the new Parliament.


Total number of dwellings financed for owner occupiers, seasonally adjusted, rose

by 1

per cent in August, to be down 22.8 per cent on July last year.


Number of loans for ‘new’ dwellings (construction/purchase of new dwellings combined)

fell by 1.3 per cent in August, to be down 25.2 per cent on the same month last year:

-

the number of loans for the construction of dwellings fell by 1 per cent in August, to be

down 27.9 per cent on the same month last year;

-

the number of loans for the purchase of new dwellings fell by 2 per cent in August, to be

down 18.7 per cent on the same time last year.  


The number of loans for the purchase of established dwellings

rose

by 1.4

per cent

in

August, to be down 22.4 per cent on the same time last year.


The value of lending to finance the purchase of investment housing fell by 3.9 per cent in

August, to be down 4 per cent on a year ago

-

the value of lending to finance construction of dwellings for rent or resale rose by 25.6

per cent, to be up 47.1 per cent on a year ago.

For further information contact:

Peter Jones, Chief Economist, Mobile 0403 440 838






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